A Senate committee in the Indiana state legislature has advanced a medical debt collection bill, Senate Bill 317, which aims to introduce new consumer protections related to medical debt. The bill, which passed unanimously in the Senate Health and Provider Services Committee, seeks to regulate hospital payment plans, limit wage garnishments, and restrict liens on primary residences for eligible low-income individuals.
Driving the news:
- Payment plan restrictions: Under SB 317, hospitals must offer payment plans to patients that allow at least 24 months for repayment. Monthly payments cannot exceed 10% of a patient’s gross household income.
- Financial assistance disclosures: Hospitals would be required to provide written notice about charity care programs and payment plan eligibility, post information in emergency rooms and admissions areas, and include financial assistance details on billing statements.
- Garnishment & liens: The bill prohibits wage garnishment and liens on a consumer’s primary residence due to medical debt — but only for those earning under 250% of the federal poverty level (about $78,000 for a family of four in 2025). The current garnishment limit is tied to the federal minimum wage. The original bill included a prohibition on liens against all personal and real estate property, and banned wage garnishments to recover medical debts, but those provisions were adjusted in an amendment to the bill.
The big picture: Indiana residents currently have an estimated $2.2 billion in medical debt in collections. Lawmakers argue that the bill provides much-needed relief, especially for individuals struggling to keep up with high medical expenses.
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